Market Outlook 1-10-2009

Heavyweights led the way as up move gathered further momentum during the day. Banking and Auto stocks were in demand as buyers chased big names like Maruti, ICICI and SBI. SBI was up around 6% while others like Axis, ICICI and Kotak too were up significantly. In fact, buying within the banking sector was spread across all segments stocks like IOB, Uco, Yes bank and Karur Vysya Bank too moved up smartly. Auto heavyweights moved higher in anticipation of good sales figures for September. Significant gains were also seen in BEL, Bhushan, Jindal SAW, Financial Tech, DCHL and Sintex. Some of the smart movers from yesterday witnessed profit taking and lost some ground. The list includes GSPL, MRPL, Dabur and ONGC. Volumes improved significantly from yesterday’s levels while breadth remained positive. Expectedly, some improvement in momentum was seen as Nifty moved past 5035. Sensex too settled above 17000, yet another psychological milestone. Significantly, the early movers like Autos and Banking are still leading the rally. Others major sectors like Oil and Gas and Infrastructure are still in the catching up mode. This generally augurs well for the future course of current big move that started in March 2009. Nifty can now target 5265-5290 in coming weeks, with some resistance coming around 5120-30. Private banks are showing fresh momentum and more upside is likely in stocks like Axis, Yes bank, Kotak, Indusind, Federal bank and KV Bank. Fresh breakouts are seen in DCHL and BEL. Both could move up by around 12-15% if they sustain above 125 and 1540 respectively. Sugar counters are showing some signs of resuming uptrend, as the corrective/consolidation phase seems to be ending. Amongst others more upside is likely in M&M, Tata Steel (above 515), Vijaya Bank, Indian Bank, Sintex, APIL and Aban.